Tag: China Macroeconomy

China’s state protection for their enterprise is equivalent to parents holding their kids in their arms and running the race for the kids.

Almost daily, I see messages to boycott Chinese products. How often have we thought of investing more and buying a costly product made by our local industry? How often do you really research (at the store) about the origin of the product?

Buying locally promotes local economy and consequently, helps a local ecosystem. If one wants to willfully subject our community to despair, we should stay away from contributing to our local economy. We also lose a lot of foreign currency perpetually, when we buy substandard products again and again, it affects the Macroeconomy of the country.

Despite, we all buy cheap products from China. What drives this ambivalence? Or is it that we are only as active as forwarding some messages? What would drive us to actively change our behavior?

Bloomberg published a very interesting story on how Chinese Airlines are flooding the market with cheap ticket airlines and creating an unhealthy competition of killing other national airlines. The Link is here, http://bloom.bg/2hmk28x. Below is generally and most commonly felt reaction to this Chinese Imperialism.

We need to protect our customers, our market and our ecosystem of supply chain and customers. Why? The consequences are grave. Yesterday, it was Imperialist England, tomorrow, it will be Imperialist China. We need to break this vicious cycle, somewhere. What about the protections offered through WTO?

China is circumventing WTO approved competition

Article 20 of the General Agreement on Tariffs and Trade (GATT) allows governments to act on trade in order to protect human, animal or plant life or health, provided they do not discriminate or use this as disguised protectionism. However, WTO is still lopsided with built-in obsolescence and China have found a way to circumvent competition with State Protection.

Ambivalence or Apathy?

Almost daily, I see messages to boycott Chinese products. Mostly, we all agree that we should not buy or abandon Chinese products, either for their substandard component or built in obsolescence. How often have we thought of investing more and buying a costly product made by our local industry? How often do you see really investigating yourself at the store about the origin of the product? Despite, we all buy cheap products from China.

We all know, buying locally promotes local economy and consequently, helps a local ecosystem. If one wants to willfully subject our community to despair, we should stay away from contributing to our local economy. Now, these are not unknown dynamics, despite, we all show apathy in actively changing our behavior. Some little facts not thought off generally, we lose a lot of foreign currency, it affects the Macroeconomy of the country too.

What drives this ambivalence? Or is it that we are only as active as forwarding some messages? What would drive us to actively change our behavior?

Value for Money

My father bought a ceiling fan from Usha in 1965 and except for occasional repairs or change of coil, as of 2016, that ceiling fan is still working. I knew a Professor, who worked as a fellow around at a US University at around the same time. While going back, he bought a refrigerator and barring occasional change of Freon, that is still working. That ceiling fan or that refrigerator, both hold a value despite fifty years of it continuous work. These are examples of Value to Money.

The Supply Chain – Willful Omission

In 2003, I bought a pedestal fan to withstand the summer heat of Texas. It was $39.99 plus taxes. I was so excited for the savings on that pedestal fan. Within three years, the legs broke and I had to discard that pedestal fan. Obviously, it was made it China. However, China is not to be blamed alone.

It is a completely well oiled machinerythat is destroying the value of the customer. I bought that fan from one of the biggest retail outlet. This retail outlet, as is usual in the industry, has several vendors that procure for them from China. The manufacturers, the vendors, the retailers all know that the fan will last beyond the three months of warranty period. Despite, they promoted the product. This is not an act of omission, this is an act of willful commission in promoting a product that destroys the money of your customer. Why would an entire chain do that? Why would others keep watching? Obviously, their business model runs on these cyclic purchases occurring every so many years.

Lack of collective thinking is organized society

Almost daily, I see messages to boycott Chinese products. Almost all agree that we should ban or abandon Chinese products, either for their substandard component or built in obsolescence. Despite, we all proceed and buy cheap products from China. How often have we thought of investing more and buying a costly product made by our local industry? How often do you see really investigating yourself at the store about the origin of the product?

This is primarily dictated by individual interests which overrides our norms of collective living, how can we change this behavior?

We should boycott Chinese products, including Chinese services. This is slowly going towards economic imperialism. First, low cost products with built in obsolescence and state funded manufacturing with substandard material flooding the market to kill competitive industry built on true enterprise. Now, State sponsored services killing competitive industries.

This sounds similar to a competition at school where parents are (cheating) to help their kids win the game. It is fair to drop kids to school, it is fair to be with them while they are studying, but it is not fair to do their homework. Here, China is actually holding these enterprises in their arms and running for them.

Chinese State funded Enterprise a Threat to Global Economy at Local Scale.

State funded subsidized industry with gross mismanagement of labor and environmental laws. The model is reminiscent of a philosophy adopted from vexed state machinery. If we think, this is specifically affecting only one country, we are wrong. This is almost universal. Chinese state sponsored protectionism is a threat across the globe. Almost all local economies, irrespective of the countries are likely to to affected, to a greater or lesser degree.

If a vendor has apathy towards his customer and their sentiments, if a customer lacks that collective social thinking and the Government lacks the oversight, can we really get rid of these substandard products built with obsolescence from China?

Cognitive dissonance or Collective Apathy

I believe, only a collective responsible thinking will drive this change. Who would do that?

(Wow, don’t get me wrong – Be careful; let’s differentiate Chinese man from China. Yes, it has always been challenging for us to differentiate between Pakistan and Pakistani. So, let us not repeat that).